measuring progress of the green economy

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  • 1. DRAFT WORKING PAPER3

2. AcknowledgmentsThis draft working paper was written by Andrea M. Bassi and Sheng Fulai, with contributionsfrom Derek Eaton, Guido Sonnemann, Yacouba Gnegne and Joy Kim. Leigh-Ann Hurt,Ashibindu Singh, Ron Witt, Stefanos Fotiou and Jaap van Woerden provided comments. KimHyojoo provided research assistance. The views expressed in this paper do not necessarilyrepresent those of UNEP.Copyright United Nations Environment Programme, June 2012This draft working paper may be reproduced in whole or in part and in any form for educational and non-profit purposes without special permission from the copyright holder, provided acknowledgement of thesource is made. UNEP would appreciate receiving a copy of any publication that uses this publication as asource.No use of this draft working paper may be made for resale or for any other commercial purpose whatsoeverwithout prior permission in writing from UNEP.DisclaimerThe designations employed and the presentation of the material in this publication do not imply theexpression of any opinion whatsoever on the part of the United Nations Environment Programmeconcerning the legal status of any country, territory, city or other area or of its authorities, or concerningdelimitation of its frontiers or boundaries. Moreover, the views expressed do not necessarily represent thedecision or stated policy of the United Nations Environment Programme, nor does citing of trade names orcommercial processes constitute endorsement. 3. Measuring Progress towards a Green EconomyList of acronyms and abbreviations ............................................................................................ 4Executive summary....................................................................................................................... 5I.Introduction ........................................................................................................................... 6II. Indicators for environmental issues and targets................................................................. 8III. Indicators for policy interventions..................................................................................... 11IV. Indicators for policy impacts on well-being and equity ................................................... 13 4.1 Well-being indicators...................................................................................................................... 14 4.2 Social equity indicators................................................................................................................... 16V. Examples of policy instruments and related indicators ................................................... 19 5.1 Incentives ......................................................................................................................................... 19 5.2 Public procurement ........................................................................................................................ 19 5.3 Regulation........................................................................................................................................ 19 5.4 Education, training and skills development ................................................................................. 20VI. Data needs and capacity building ...................................................................................... 21VII. Ways forward...................................................................................................................... 23References.................................................................................................................................... 25 3 4. List of acronyms and abbreviationsBtuBritish thermal unit, a traditional unit of energyDPSIRDriving force Pressure State Impact ResponseEGSS Environmental Goods and Services SectorFAOFood and Agriculture Organization of the United NationsGDIGender-related Development IndexGDPGross Domestic ProductGHGGreenhouse Gasha hectareHDIHuman Development IndexICTs Information and Communication TechnologiesIEAInternational Energy AgencyIILS International Institute for Labour StudiesIISD International Institute for Sustainable DevelopmentILOInternational Labour OrganizationIOEInternational Organisation of EmployersIRPInternational Resource PanelITUC International Trade Union ConfederationMDGs Millennium Development GoalsOECD Organisation for Economic Co-operation and DevelopmentPM10 Particulate MatterR&DResearch and DevelopmentSEEA United Nations System of Environmental-Economic AccountingSNASystem of National AccountsTEEB The Economics of Ecosystems and BiodiversityUNCSDUnited Nations Commission on Sustainable DevelopmentUNEP United Nations Environment ProgrammeUNFCCC United Nations Framework Convention on Climate Change 4 5. Executive summaryThe measurement of a green economy follows its definition. For the United Nations EnvironmentProgramme (UNEP), a green economy is one that results in improved human well-being and social equitywhile significantly reducing environmental risks and ecological scarcities. Various indicators are alreadyavailable to reflect these aspects and show the extent to which progress has been made.A green economy is also considered more as a vehicle to deliver sustainable development than adestination in itself. Accordingly, indicators need to be placed in the context of making green economypolicies and achieving sustainable development. Governments may choose environmental, economic orsocial issues as an entry point to adopting a green economy approach. For UNEP, it is natural to start withenvironmental issues.Indicators are needed to bring attention to the issues, set targets and track progress. From a global point ofview, broad indicators could cover the areas of climate change, ecosystem management, resourceefficiency, and chemicals and waste management. Within each of these areas, a few leading indicatorsmay be identified. Under climate change, for example, the leading indicators may include carbonemissions, the share of renewable energy in the power supply, and energy consumption per capita.Once targets are established, policies are needed to address the issues and reach the target. In the greeneconomy approach, a core policy instrument is the shift in investment towards green activities, to besupported by other enabling conditions such as fiscal reform, pricing policy, government procurement,and training for green skills. Indicators are available to show and track these policy inputs. Under fiscalpolicy, for example, indicators can show subsidy levels for fossil fuels, water and fisheries.Policies in a green economy approach are expected to not only address the main issues for which they aredevised, but also generate co-benefits. If the issues we start with are environmental, then green economypolicy interventions are expected to also contribute to human well-being and social equity. If we startwith economic or social issues, similarly, policy interventions should generate co-benefits for otherdimensions of sustainable development.Major components of well-being and social equity in connection with green economy policy interventionsmay include: employment, the growth of the environmental goods and services sector (EGSS) (because itwould reduce environmental pressure, which would support improvement in human well-being), totalwealth including human capital, natural capital and produced capital, access to key resources such asclean energy, water and sanitation, and health. Investing in clean technology, for example, is expected togenerate jobs and income from the growth of the EGSS. Investing in ecosystem restoration is expected toenhance the value of natural capital, while training in green skills is expected to build up human capital,both adding to the total wealth of nations.For many countries, notably those in developing regions, it will be necessary to enhance their capacity tocollect and evaluate data in order to use indicators in support of their policymaking for a green economy.Technical assistance and capacity building will be required in order to address the special needs of thesecountries and support the development of the necessary information systems. 5 6. I.IntroductionIn October 2008, UNEP launched a Green Economy Initiative consisting of research, advocacy andadvisory services to governments. The objective is to motivate policymakers to support increasedinvestments in environmentally significant sectors such as renewable energy, clean technologies, energy-efficient buildings, public transport, waste management and recycling, and sustainable management ofland, water, forests, fisheries and tourism. To achieve this objective, the initiative focuses ondemonstrating the contributions such green investments can make to the growth of income and jobs andimproved access by the poor to clean energy, safe water and sanitation, apart from reducingenvironmental pressure.As many countries are now embracing the green economy approach and designing related strategies,policies and investments, the issue of measurement has arisen. A typical question is how to measure agreen economy. The answer to such a question demands an answer to the question of what is a greeneconomy.UNEP defines a green economy as one that results in improved human well-being and social equity whilesignificantly reducing environmental risks and ecological scarcities. Accordingly, human well-being andsocial equity as well as environmental risks and ecological scarcities need to be measured throughindicators. Many elements of well-being and equity are already covered by existing indicators, such asthose tracking the Millennium Development Goals (MDGs), the Human Development Index (HDI), andthe set of Sustainable Development Indicators. Many elements of environmental risks and ecologicalscarcities are also covered by existing indicators,

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